Whose Responsibility is Fundraising Anyway?

Many Founders and Board Chairs I talk to find it difficult to get their Board members to take responsibility for fundraising. It often comes down to whose responsibility is it?

Today, we talk about the responsibilities as it pertains to the Board- collectively and individually. Instead of being a bad Board member, a little education can go a long way.

The Board of Directors Responsibility- Collectively

The Board of Directors has a legal responsibility if it is incorporated in the United States and has the Internal Revenue Service designation of a 501(c)3 organization.  There are three legal responsibilities. They are:

1. Duty of Care
2. Duty of Loyalty
3. Duty of Obedience

Let’s look at each of these.

Duty of Care means the Board has been entrusted to take care of the nonprofit by ensuring prudent use of all assets- facility, people, and goodwill. When a Board member is acting with duty of care, they are making informed decisions and judgments in the best interest of the organization.  They are doing due diligence to secure facts and asking questions to get clarity on issues. They are asking for professional advice when the situation warrants it. In other words, they are actively participating in the decisions of the organization.

Duty of Loyalty means the Board ensures that the nonprofit’s activities and transactions are advancing its mission; recognizing and disclosing conflicts of interest; and making decisions that are in the best interest of the nonprofit. For the Board member, it means that the organization’s needs come before your own or your agenda. The best interest of the organization trumps everything else.

Duty of Obedience means the Board ensures that the nonprofit obeys applicable laws and regulations; it follows its own bylaws; and adheres to its stated corporate purpose and or mission. Board members should be running every decision through a litmus test of:

• Is this legal?
• Does this conflict with our bylaws?
• Does this align with our mission?

The Board of Directors Responsibility- Individually

In addition to the broad legal responsibilities, there are seven individual responsibilities that are generally accepted among nonprofits. They are:

• Mission

Have you figured out how important the organization’s mission is? Not only do I go in depth with this mini-training on how it is the very roots of your organization, but two of the three legal duties- Loyalty and Obedience- involve aligning with your mission. Each Board member is required to help keep the mission of the nonprofit. Two questions each member should be asking is:

• What is our mission?
• Does this action serve the beneficiaries of our nonprofit?

Every decision should align with your mission.

 

• Hire Executive Director/ CEO

For many of you, this is a goal to work toward. It’s important to understand that the Executive Director reports to the Board and the staff report to the Executive Director. It is never appropriate for the roles to be reversed or deviated from the chain of command. Having said that, the Board also has a responsibility to support the Executive Director they hire.

 

• Meeting Attendance and Participation

This is a big one for a lot of people. Board members must take meeting attendance and participation seriously. It ties directly to Duty of Care. How can you make informed decisions and gain clarity of issues if you never come to a Board meeting? How can you participate in discussions if you aren’t there or prepared to discuss the item at hand? If your Board meetings aren’t running as smoothly as you like, I have a blog post Secrets of a Successful Board Meeting.

 

• Committee work

Not all Boards have committees but should be working toward them. Committees are a great way to specialize in certain areas and provide oversight of that area. A small team can lighten the load and be able to bring recommendations to the Board.

 

• Finance

Each Board member must ensure that financial accountability and stewardship are hallmarks of operations.  This may mean learning how to read a spreadsheet or interpreting numbers.

It also means you participate in some form of fundraising. This may include identifying prospects or “opening doors” to possible donors (help obtain appointments). Every legal duty- Care, Loyalty, and Obedience has a thread of funding or applies to the activities of funding.

 

• Provide Financial Support

Yes. Board members must be expected to give. Jerold Panas, a well respected nonprofit leader, says in his book The Fundraising Habits of Supremely Successful Boards (book review here) that the organization should be in the Board member’s top five charities they give to.  I also strongly believe that financial support should be in proportion to one’s capacity to give. In other words, $120 may not be a big deal to some on the Board but a whole month’s salary for others. I coached a Founder not too long ago with this problem. Some Board members were American and some were from Uganda. There was a huge difference in what each person was able to give.

 

• Advocate in the Community 

Each Board member should be an ambassador of the organization in the community. They should be talking among their peers about the impact you are making. They should be looking for opportunities that align with your mission. They should also strive to present themselves positively in the community. This ties to the legal responsibility of Duty of Care and managing goodwill well.

 

I think you can tell where the Board is on the fundraising responsibility. It is part of signing up to be a Board member. Period.